The universal service fund has been growing at an alarming rate over the past few years, and in order to curb its growth the Federal Communications Commission choose to cap the amount of support a competitive eligible telecommunications company could receive in 2008. The Rural Cellular Association filed a petition in the D.C. Circuit court of appeals to remove this cap. The court seemed to support the position of the FCC in capping the fund, according to a Monday research report by Stifel Nicholas.
Even though the cap is in place, the FCC has allowed eligible recipients of Universal Service Funds to petition to receive an increase in current support if they need more funds. The rural cellular group believes that the petition mechanism that the FCC has setup is not fair, as there is no benchmarking to compare against.
There has been a large amount of criticism about the funding of competitive telecom companies, due to the fact that the amount a company receives is based upon the funding request a company asks for not an objective amount based upon customers services or presumed costs. The current USF system is clearly broken, said Stifel, and the FCC has seemed to wait until Chairman Genachowski was appointed to begin restructuring.